Online shopping surge helps lift Ikea's full-year sales

Ikea has reported a 5 per cent rise in annual sales as strong online growth and new stores in countries such as India and Latvia helped the world's biggest furniture retailer to cope with mounting competition.

LEIDEN, NETHERLANDS (REUTERS) - Ikea is known for its flat packs, but sales are far from flat - at least at new stores, like this one in Madrid.

It's a city centre outlet aimed at those without their own transport.

That new strategy and a 31 per cent jump in online trade helped sales at the world's largest furniture retailer reach US$45 billion (S$62.2 billion) for the year through August. That was an increase of around 1 per cent.

Growth was in line with the previous year, though sales at existing stores wasn't so good.

"There's a lot of people that chose not to buy from us because they don't have a car or because they don't have the time to interact with us, so this is what we are exploring now," said Ikea Group CEO Jesper Brodin. "It's a bit early to speculate on it, but we see this as our main penetration potential at the moment."

Ikea's new strategy involves more investment in services for delivery and assembly along with new tech efforts like augmented reality apps to attract more customers.

Said Ikea Group Chief Technology Officer, Barbara Martin Coppola, "We're also experimenting with human chatbots - there is a test actually going on in Sweden, with co-workers that can be contacted by consumers by video chat. So it's really fantastic to see human interaction through technology."

Ikea has expanded into other countries like India and Latvia in a bid to cope with competition from the likes of Amazon and Made.com.

It has opened 19 new outlets this year and now has 422 in over 50 markets.